Indirect tax officials’ appraisal to consider arrears recovery

Officials were asked to concentrate on recovery of clearly recoverable arrears, which are substantial (more than Rs 50 lakh) and where there are clear chances of recovery by March 2019.

Officials were asked to concentrate on recovery of clearly recoverable arrears, which are substantial (more than Rs 50 lakh) and where there are clear chances of recovery by March 2019.

The indirect tax department has made ‘recovery of arrears’ a parameter in the annual performance appraisal for tax officials, in a bid to incentivise effort to bring down recoverable arrears that currently stands at over Rs 26,000 crore.

Against a target of Rs 10,000 crore for the current fiscal, the tax arrears recovery (TAR) vertical of the department has managed to achieve only Rs 3,500 crore in the April-December period.

“Any shortage in your recovery target of arrears will be taken seriously and may reflect in your APAR as per new guideline for arrears assessment,” Pranab K Das, chairman of the Central Board of Indirect Taxes said in his communication with department officials.

He further said achieving the target for the year would need extraordinary effort by field formations, especially as the target for current fiscal is substantially more than previous two fiscals – it was set at Rs 6,000 crore for FY18 and Rs 5,000 crore for FY17.

According to official data, the total outstanding amount of indirect tax payable to the exchequer stood at Rs 2.59 lakh crore in the first nine months of the current fiscal. This has risen by over 37% since FY 2015-16.

Although a large amount of outstanding tax arrears are not easily recoverable because of stay orders or further appeals made in higher judicial forum, over Rs 12,000 crore is considered to be easily recoverable due to absence of any litigation and identification of persons or factories for recovery.

“(Though) the commissioner (TAR) has written several letters and made telephonic calls to all zones on several occasions as well as visited most of the zones with large pendency of recoverable arrears for discussion, the achievement is not satisfactory at all,” Das said.

Officials were asked to concentrate on recovery of clearly recoverable arrears, which are substantial (more than Rs 50 lakh) and where there are clear chances of recovery by March 2019.